Tuesday, December 11, 2007

As predicted, the Dow dropped on que

The SAMVA USA chart (based on the creation of a Perpetual Union in 1781) is confirming its merit as a basis for accurate predictions using the System's Approach. Yesterday, a prediction made on SAMVA list on November 30, was published on this blog (at 8:15 AM on Dec. 11), that the US Federal Reserve would likely disappoint the financial market with its rate decision.
The speculation about what the decision would be was not entirely correct. The Fed reduced interest rates by a small margin and did not keep them unchanged. However, that is beside the point as the focus of the prediction was that the decision by the Fed would surprise and disappoint the market. And did they ever. The big story is the reaction in the stock market. The Dow which was up over 50 points turned sharply lower after the announcement and fell almost 300 points by the close, or over 2%. This is a very negative reaction by the market participants.

The market analysis today is confirming the prediction. A Bloomberg headline states "Fed Skeptical of Recession, Disappoints Some Investors With Cut." The report notes that "the move put the central bank, which has struggled to contain the subprime credit collapse, further at odds with investors" who wanted a bigger cut. The main difference concerns the growth outlook which the Fed views more optimistically than investors. A noted market analyst commented the "Fed scared the hell out of the market" with its decision while another claimed "the Fed just doesn´t get it." Such overreactions are typical in the financial market.

The prediction is for continued volatility in the days ahead, while the aspect of Ketu and Jupiter is still close. During this time investors will "readjust their sights".

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